Pop quiz: which country is the world’s leading producer of soybeans? Instinct might say China, or perhaps Japan, given the traditional centrality of soy to East Asian cuisine.
A slightly more analytical guess might be the United States, given it’s a huge country with lots of farms that can sell tonnes of the stuff to a voracious market like China’s. But research will take you to Brazil, which now accounts for 40% of the global market, largely off the back of Chinese demand.
It’s a recent development too, having roughly doubled in a decade. And it’s a consequence of Donald Trump’s first-term trade war with China, prompting China to buy from Brazil what it once bought from the US. America lost some US$27 billion of agricultural business in the process – 71% of that was in soybeans. And yet, despite all this, American farmers, including in the soybean hubs of Iowa, Indiana, Minnesota and Illinois, voted heavily for Trump last year, even as he promised the much broader, sweeping trade war whose culmination we have now seen in “Liberation Day”.
That’s pointing us in the direction of something important: that while the immediate consequences of Trump’s love of tariffs are economic, they are not best understood as an economic policy.
The clue is in the branding. Liberation Day suggests some form of bondage in present arrangements; that the US is somehow entrapped or ensnared. Liberation is not primarily an economic idea, but a political one. Especially in American political mythology, it is its own end to be pursued – even at great cost.
Trump doesn’t deny the possibility the US could tip into recession over this. He brushes aside the tanking sharemarket on the basis that “you have to do what’s right”. Aside from its occasional boasts of making America rich, Trump’s rhetoric so often couches this in terms of justice: “For years the globalists, the big globalists have been ripping off the United States… All we’re doing is getting some of it back, and we’re going to treat our country fairly.”
It’s a startling claim from the president of the country which, more than any other, foisted globalisation on the world. The country whose government won the Cold War, and whose academics declared that victory the “end of history”. But it’s also — perhaps most instructively — from the president of a declining power.
The US is now a country saddled with uncontrollable debt. Its schools are getting worse. Its infrastructure is falling apart. Its wages have stagnated for decades. Its manufacturing has long been in decline. Its inequality is widening. For all its defence spending (which adds to its debt), it frequently starts wars it does not win. Even the National Defence Panel agrees that US military superiority has “eroded to a dangerous degree”.
Much of Trump’s support comes from those who lose most from these developments. And much of his policy is directed at these problems, cogently or otherwise: tariffs to protect manufacturing, axing diversity programs in educational institutions, a stated reluctance to fight wars. Trump is famously unpredictable, but his unifying theme is utterly consistent: the retrieval of American power. Make America great again, etc.
The best critique of Trump is not that he is making his billionaire friends rich (they’re the ones losing eye-watering amounts on the sharemarket, or in Elon Musk’s case, watching their businesses tank). It’s that he doesn’t understand the roots of American power, and is handing wins to China at almost every turn. It’s that he thinks a declining power can reassert itself by will and force, and that the world won’t simply begin to find others to rely on.
This is, in spirit, Brexit on a global scale. That, too, was a case of a population voting, knowingly or otherwise, to make themselves less wealthy in order to “Take Back Control”. That too, was therefore not merely economic: Brexit promised its own sort of liberation day, in that instance from European diktat. And that, too, came amid the pangs of decline, in that case the now-comprehensive decline of the British Empire and the existential questions that raises about what Britain is in its wake.
That’s why both these phenomena are ultimately projects of national sovereignty. They are tied to greatness because they hark back to an era where being a great power meant the power to dictate terms. With that comes a mythology that more sovereignty means more power. That is to say, a mythology that paints globalisation — with its logic of interdependence — out of the picture.
Each, then, is captured by the “globalisation trilemma” famously identified by Harvard economist Dani Rodrik. Put simply, Rodrik argues you can’t have globalisation, democracy and sovereignty all at once – you can only have two. Sovereignty and globalisation works, but only if the government forces it on the people against their will, by having open borders, for example. Democracy and sovereignty works, but only if you opt out of globalisation and retain the control to enact the will of the people. And globalisation and democracy works, but only if the people get to vote directly on the global institutions that influence their lives, which would in turn make the nation state less relevant and erode its sovereignty.
The trouble is we’ve spent decades pretending this isn’t so; that you can have all three. We’re here because this could never hold. Eventually, the forces of democracy and sovereignty gushed forth. And because they’re doing so in a globalised economy, the economic results will be painful.
Brexit has definitely harmed the British economy – the only real debate is to what extent. Goldman Sachs now puts the chances of a US recession at 35% in the next 12 months, to say nothing of the possibilities of a global economic downturn.
But to critique all this on economic terms is to miss a large chunk of the point. Sovereignty and control are things people tend to value in their own right. And they’re especially potent for people who feel they are losing their status. People like citizens of mighty nations that are now shining a little less brightly.
As the economic consequences become real, some believers will no doubt waver. But a great many will remain because in the end, we’re watching a festival of sovereignty against a backdrop of lost pride.
Republished from The Sydney Morning Herald, 4 April 2025
Waleed Aly
Waleed Aly is a broadcaster, author and academic. He is a lecturer in politics at Monash University and co-host of Channel Ten’s The Project.